FTC1991ANNUAL REPORTU.S. FEDERAL TRADE COMMISSIONWASHINGTON, D.C.ANNUAL REPORT OF THE FTC FOR FISCAL YEAR 1991SUMMARYThe Federal Trade Commission enforces a variety of federal antitrust and consumer protection laws. TheCommission seeks to ensure that the nation's markets function competitively, and are vigorous, efficient, andfree of undue restrictions.The Commission also works to enhance the smooth operation of the marketplaceby eliminating acts or practices that are unfair or deceptive.In general, the Commission's efforts are directedtostoppingactionsthatthreatenconsumers'opportunitiestoexerciseinformedchoice.Finally,theCommission undertakes economic analysis to support its law enforcement efforts and to contribute to thepolicy deliberations of the Congress, the Executive Branch, other independent agencies, and state and localgovernments.In addition to carrying out its statutory enforcement responsibilities, the Federal Trade Commissionadvances the policies underlying Congressional mandates through cost-effective non-enforcement activities,such as consumer education.This report itemizes the Commission's accomplishments in fiscal year 1991.MAINTAINING COMPETITIONTheBureauofCompetitionandtheCommission'stenregionalofficesassistedtheCommissioninfulfilling its mission of maintaining competition in the U.S. economy.In the merger area, the number ofHart-Scott-Rodino premerger filings for fiscal year 1991 decreased by approximately 32 percent.In fiscal1991, the Commission reviewed mergers in many sectors of the economy and measures were taken to ensurecompliance with Commission orders requiring divestitures and prior approvals of acquisitions.Outsidethemergerenforcementarea,theCommissioncontinuedeffortstoeliminaterestraintsoncompetition,maintaincompetitioninthehealthcareindustryandchallengeanticompetitiveagreementsamong competitors, especially competitive restraints involving professionals.CONSUMER PROTECTIONThe Bureau of Consumer Protection continued its mission, with the assistance of the ten regional offices,to improve market performance by emphasizing market-oriented remedies and disclosure of information sothat consumers could make informed purchase choices.In fiscal 1991, the Commission obtained settlementsincasesinvolvingflavoredwineproducts,andthedeceptiveandunfairmarketingof"900"numberinformationservicestochildren.Inaddition,init'sfirsttwocasesinvolvingenvironmentalclaims,theCommission obtained consent agreements prohibiting deceptive ozone-safety claims.Another agreementresultedinthefirstFTCorderdealingwiththeuseofspecialconsumerreportsincreasinglyusedbyemployers in making hiring decisions.More than $75.5 million inMAINTAINING COMPETITION MISSIONThe Maintaining Competition Mission is devoted to preventing unfair trade practices and promotingcompetition through enforcement of the Federal Trade Commission Act, Clayton Act, Robinson-Patman Act,andHart-Scott-RodinoAntitrustImprovementsActof1976.TheBureauofCompetitionisprimarilyresponsible for the Maintaining Competition Mission with support from the Bureau of Economics, and theten regional offices.The activities of the mission are divided into five major program areas: Premerger Notification, MergersandJointVentures,HorizontalRestraints,DistributionalArrangements,andSingleFirmViola-.ions(focusing primarily on monopolization, predation and practices that may facilitate collusion).TheBureauofCompetitionisresponsibleforadministeringtheHart-Scott-RodinoAntitrustImprovements Act of 1976 and for taking steps to ensure compliance with the program's statutory premergernotification rules.The other four programs areas review violations of the antitrust laws in industries in whichtheCommissionhasparticularexpertiseincludingpetroleum,chemicals,naturalresources,food,transportation, and health.In addition, the Commission reviews suspected collusive behavior among licensedprofessionals,andprovidesantitrustpolicyanalysisandstudiestoincreaseconsumerawarenessandtofurther the understanding of the role of antitrust in a competitive economy.PREMERGER NOTIFICATIONTheHart-Scott-RodinoAntitrustImprovementsActof1976("HSRAct")requiresPersonsmeetingcertain size requirements who are planning significant acquisitions to file notification with the Commission,and to delay consummation for a prescribed period of time.The premerger notification program was enactedtoprovidetheCommissionandtheDepartmentofJusticewiththeopportunitytoreviewproposedtransactions and to take enforcement action, if appropriate, to prevent consummation of transactions thatviolatetheantitrustlaws.TheCommission,alongwiththeDepartmentofJusticeisresponsibleforadministering the program and taking steps to ensure compliance with the program's requirements.During fiscal year 1991, 1,529 transactions were reported to the Commission pursuant to the premergernotification program, a decrease of approximately 32 percent when compared to fiscal 1990.The PremergerOffice staff responded to approximately 10,000 inquiries regarding the application and interpretation of theHSR Act and rules.The Commission released two pamphlets designed to assist the public understanding of the reportingrequirements for mergers and acquisitions under the Premerger Notification Rules.Guide I presents a basicintroduction to the premerger notification program; Guide II summarizes how to determine whether a3transaction is reportable under the notification and waiting period requirements.The Guides were preparedby the Premerger Office staff and the Compliance Division of the Commission with assistance from theAntitrust Division of the Department of Justice.A Memorandum of Agreement was entered in July 1991 between the Department of Justice and theFederal Trade Commission with respect to civil penalty actions under the premerger notification provisionsof the HSR Act.Under the agreement, the Department will determine within 45 days whether or not it willtake any action on a Commission request to initiate a civil penalty suit for-alleged violations of the HSR ActandmayappointCommissionattorneystoprosecutesuchactions.TheAttorneyGeneralretainsfullauthority over any litigation, including any proposed settlement arrangements.The Commission initiated four civil penalty actions for alleged violations of the notification and waitingperiod requirements under section 7A(g)(1) of the HSR Act during fiscal year 1991.Each complaint andaccompanying consent settlement was filed in the U.S. District Court for the District of Columbia by theDepartment of Justice at the request of the Commission.In Reliance Group Holdings Inc./Spectra-PhysicsInc., a $550,000 civil penalty was paid; in Service CorporationInternational/SentinelGroup,Inc.,a$500,000civilpenaltywaspaid;inEquityGroupHoldings,apartnership controlled by Steven M. and Mitchell P. Rales, an $850,000 civil penalty was paid in settlementof charges concerning the acquisition of Interco stock; and, in Atlantic Richfield Company/Union CarbideCorporation, each party agreed to pay $1 million.This $2 million settlement is the second largest civilpenalty ever secured for a violation of the HSR Act.In addition, the Department of Justice authorized the Commission to file one other complaint chargingthat stock was acquired in violation of the HSR Act.The complaint in General Cinema Corporation/CadburySchweppes p.l.c. seeks the maximum civil penalty under the law.MERGERS AND JOINT VENTURESThis program identified and investigates those mergers, acquisitions, and joint ventures that are likelyto result in the lessening of actual or potential competition, increase individual market power and lead todominant firm behavior, or increase the likelihood of collusion.During fiscal year 1991 the Commission initiated 45 new full-phase investigations, 33 of which involvedrequests for additional information under the Hart-Scott-Rodino Antitrust Improvements Act, and continuedwork on investigations carried over from fiscal 1990.The Commission authorized preliminary injunctionactions against seven mergers: E G & G, Inc./Heimann GmbH; Harbour Group Investment, L.P./DiethelmHolding (U.S.A.) Ltd.; Ingersoll-Rand Co./ Universal Bearings Inc.; Instruments SA/INTEVAC, Inc.; OyWartsila AB/Computerized Security Systems,4Inc.; University Health, Inc./St. Joseph Hospital; and Wiggins Teape Appleton p.l.c./Boise Cascade Corp.An administrative complaint was issued in Harbour/Diethelm that challenged their proposed formation ofa joint venture.After a federal district court granted the Commission's request for a preliminary injunction,the parties abandoned the transaction and agreed to settle charges in a consent agreement.That agreementrequires Harbour and Diethelm to obtain prior Commission approval before acquiring any firm engaged inthe production of Schmidt-Cassegrain telescopes.The Eleventh Circuit Court of Appeals reversed a federaldistrict court's decision and granted the Commission its request for a preliminary injunction in UniversityHealth/St. Joseph after an administrative complaint was issued.The matter was pending in adjudication attheendofthefiscalyear.TheCommissionwithdrewitsmotionforapreliminaryinjunctiontoblockWiggins Teape's proposed acquisition of a paper mill after the parties abandoned the transaction.The partiesinEG&G/Heimannwereallowedtoconsummatethetransactionaftertheyrestructuredtheproposedtransactiontoeliminateantitrustconcerns.TheotherthreetransactionswereabandonedbeforetheCommission filed for injunctive relief.An administrative complaint was issued challenging R.R. Donnelley & Sons Co.'s 1990 acquisition ofMeredith/BurdaCompanies.Thecomplaintchargedthattheacquisitioncouldsubstantiallyreducecompetition in the provision of high-volume publication gravure printing in the United States and in thewestern United States.The Commission authorized staff to seek a preliminary injunction in this matter infiscal 1990.TheCommissionissuedfivedivestitureorderstosettleantitrustconcerns.TheorderinAtlanticRichfield Company/Union Carbide Corporation requires the divestiture of Union Carbide's propylene glycolandpolyetherpolyolassetsinNorthAmerica;E-Z-EMInc.agreedtodivestitsLafayette,IndianamanufacturingplantandotherassetsacquiredfromLafayettePharmaceutical,Inc.in1988;AlleghenyCorporation agreed to divest certain title plants or back plants to settle charges concerning its acquisition ofmost of the title insurance-related assets of Westwood Equities Corporation; and in T&N plc/J.P. IndustriesInc., the order required T&N to divest certain engine-bearing assets.The consent order that permitted RocheHolding Ltd.s acquisition of Genentech Inc. required the divestiture of Genentech's vitamin C assets andRoche's human growth hormone releasing factor assets.TheorderinAmericanStair-GlideCorporationrequiresthecompanytograntalicensetoCheneyCompany, Inc.'s technology in the production of curved and straight stairway lifts, and vertical wheelchairlifts.The proposed consent agreement in RWE Aktiengesellschaft/Vista Chemical Company requires RWEto grant a license for the technology used in producing its high-purity alumina.A consent agreement in Nippon Sheet Glass Company, Ltd./Pilkington PLC settled charges that Nippon'sacquisition of5twenty percent of the stock of Libby-Owens-Ford Co. could reduce competition in the North American wiredglass market.The proposed order, would prohibit the two firms from jointly manufacturing and distributingwired glass in North America.The Commission's consent order in Harold A. Honickman/ Brooklyn Beverage Acquisition Corp. settleda 1989 administrative complaint challenging the acquisition.The order requires both parties to obtain priorapproval for ten years for certain soft drink mergers or acquisitions.Three other consent agreements, placed on the public record for comment, were pending final action atthe end of the fiscal year.The proposed order in PepsiCo, Inc. would require the divestiture of Twin PortsSeven-Up Bottling Company acquired by PepsiCo in 1986 from MEI Corporation; the proposed order inService Corporation International/Sentinel Group, Inc. requires the divestiture of six specific funeral homes;and the proposed, order in Sentinel Group, Inc. requires the divestiture of funeral homes in Summerville,Waycross and Gainesville, Georgia.Administrative Law Judges filed initial decisions dismissing two complaints.In Coca-Cola Company/DrPepper Co., although the judge held that the acquisition would violate the antitrust laws he ruled that it wouldnotbeinthepublicinteresttoissueaprior-approvalordersincetheproposedacquisitionhadnotbeenconsummated.The dismissal is on appeal to the Commission.Another complaint challenging the acquisitionofDrPepperandCanadaDryfranchisesfromSanAntonioDrPepperBottlinginCoca-ColaBottlingCompany of the Southwest was also dismissed.The dismissal is on appeal to the Commission.The Commission reversed an Administrative Law Judge's decision dismissing a complaint challengingUkiah Adventist Hospital's acquisition of Ukiah General Hospital on jurisdictional grounds.The case wasremanded to the judge for a decision on the merits.In addition to University Health, R.R. Donnelley and Ukiah Adventist, three other merger cases were inadjudicationatthecloseofthefiscalyear:OccidentalPetroleumCorp./TennecoInc./Owens-Illinois,Inc./Brockway, Inc.; and, Textron Inc./Avdel PLC.One appeal from a Commission merger decision is pending.Olin Corporation filed a petition for reviewof the Commission's order, issued in fiscal year 1990, requiring divestiture of FMC Corporation's swimmingpool chemical business.HORIZONTAL RESTRAINTSDuring fiscal 1991, the Commission continued its efforts to eliminate horizontal restraints such as pricefixingandotheranticompetitiveagreementsamongcompetitors--practicesthatmaygenerallydenyconsumers access to the optimal variety, quantity and quality of goods and services at competitive prices,and deny sellers the opportunity to produce, distribute, and sell goods and services at prices they would selectunder competitive conditions.Through investigation, litigation, and negotiation,6the Commission worked to eliminate unlawful horizontal restraints on trade.In addition, the Commissionimplements its program by preparing and issuing reports, submitting comments to federal, state and localgovernmentagencies,filingamicuscuriaebriefsincourtactions,andissuingadvisoryopinionswhenappropriate.This year, the Commission issued an administrative complaint and accepted two consent agreements withrespect to an alleged boycott in Fort Lauderdale of the Cleveland Clinic Foundation.The complaints issuedagainst Dr. Diran M. Seropian, the Medical Staff of Broward General Medical Center and the Medical staffof Holy Cross Hospital, charged the doctor and the medical staffs with conspiring to prevent a provider ofalternative health care services from establishing a clinic in the area.The medical staffs entered into consentagreements settling the charges.Thirteen other consent agreements were placed on the public record for comment during the year.Elevenconsent agreements were issued: The Torrington Co. and Universal Bearings Inc. agreed that, when acquiringany needle-roller supplier, they will not consolidate any portion of their businesses prior to consummationof the acquisition.The Madison County Veterinary Medical Association settled charges that the associationand others illegally entered into an agreement not to participate in a program offered by the National AnimalWelfare Association providing low-cost spaying and neutering services.In nine separate consent agreements,three trade associations, Capital Area Pharmaceutical Society, Chain Pharmacy Association of New YorkState, and Empire State Pharmaceutical Society; four retail pharmacy chains, Fay's Drug Company Inc.,Kinney Drugs Inc., Melville Corporation, and Rite Aid Corporation; and two individuals, Mr. Alan Kadishand Mr. James E. Krahulec, agreed not to enter into any agreement with other pharmacy firms to refuse toparticipate in any third-party prescription drug program.Two consent agreements were pending final action at year's end: Connecticut Chiropractic Associationwas charged with illegally prohibiting its members from offering free or discounted services.SouthbankIPA, Inc. and its physician members were charged with restraining competition in the Jacksonville, Floridaarea by conspiring to fix the fees charged third-party payers.The proposed consent order would require thephysicians to dissolve Southbank IPA and its parent company.Twoinitialdecisionswereissuedduringfiscal1991.AnAdministrativeLawJudgedismissed,onjurisdictional grounds, a complaint challenging the agreements between the College Football Associationand Capital Cities/ABC to televise college football games.The ruling has been appealed to the Commission.In Peterson Drug Company of North Chili, New York, Inc., an Administrative Law Judge prohibited the firmfrom entering into any agreements with any pharmacy firm to withdraw from any prescription reimbursementplan.This case is a companion case to the consent orders issued this year to Chain Pharmacy AssociationofNewYorkState,Inc.andothers.PetersonDrugappealedthisrulingtotheCommission,butlaterwithdrew its appeal.The7Commission may determine whether to continue the case on its own motion or to adopt the findings of theinitial decision as its own.Following last year's First Circuit Court of Appeals decision in New England Motor Rate Bureau, Inc.v. FTC, the Commission issued a final order against unlawful ratemaking activity in November 1990.TheCommission later modified the order to allow the Rate Bureau to file collective rates for the transportationof commodities by motor common carriers in New Hampshire.In a January decision, the Third Circuit Court of Appeals reversed and vacated the Commission's ceaseand desist order in Ticor Title Insurance Co.The Court held that the companies, agreement to collectivelysetratesfortitlesearchandexaminationserviceswasprotectedbythe"stateaction"doctrine.TheCommission's petition for certiorari was pending at the end of the year.The Commission's staff has also provided comments, advice and guidance to governmental bodies andprivate groups concerning the potential anticompetitive effects of their regulatory and other activities.Theseadvocacy efforts have dealt with a variety of economic sectors, including the marketing and delivery of healthcare services, regulation of intrastate telecommunication services, gasoline pricing, ownership of radio andtelevisionstations,advertisingandsolicitationbylawyers,cabletelevisionregulation,automotiveaftermarket crash parts, trucking regulation, taxicab regulation, and bank advertising of trust funds.DISTRIBUTIONAL RESTRAINTSDuring fiscal 1991, the Commission continued to investigate restrictions on the distribution of goodsfrommanufacturerstoconsumers.Suchpracticescanlimitsourcesofsupplyorrestrictchannelsofdistribution in ways that increase prices or reduce quality.Potentially unlawful conduct includes restrictionsonresalepricesandrestrictionsonthemarketingdecisionsoffirms.Inaddition,theCommissioninvestigates discrimination in prices, terms of sale, advertising allowances, and other merchandising servicesthat tend to deny competitive opportunities to firms in the distribution chain and other practices that mayinjure consumers.TheCommissionhadmorethan40activemattersduringtheyearinvolvingallegeddistributionalpracticesinavarietyofindustriessuchasmotionpictures,clothing,furniture,carbonatedsoftdrinks,machine tools and children's toys and games.Administrative litigation continued against Harper & Row andfive other major book publishers for alleged unlawful price discrimination under the Robinson-Patman Act.The Commission accepted three proposed consent agreements for public comment.The proposed ordersinKreepyKraulyU.S.A.,Inc.andNintendoofAmerica,Inc.prohibitthefirmsfromenteringintoagreements with dealers to fix retail prices.The com-8plaint accompanying the proposed order in Sandoz Pharmaceutical Corporation charged that the companyengagedinanillegaltyingarrangementbyrequiringpurchasersofclozapine(marketedexclusivelybySandoz) to purchase patient monitoring services arranged by Sandoz through its Clozaril Patient ManagementSystem.OnremandfromtheUnitedStatesCourtofAppealsfortheDistrictofColumbia,theCommissionreissued its 1986 order in Boise Cascade Corporation and concluded that competitive injury existed whendealers who received no wholesale discounts lost accounts because Boise offered better prices and services.A second appeal by Boise was dismissed after the Commission accepted a proposal to issue a modified finalorder prohibiting Boise from knowingly receiving wholesale discounts on office products that are resold byBoise to end-users.SINGLE FIRM VIOLATIONSThe Commission opened eleven new investigations of potential single firm abuse of market power, anactivity that injures consumers by reducing output and increasing prices above the competitive level.Theprogram's objective is to prevent or remedy instances in which market power has been created or maintainedthrough anticompetitive behavior through monopolization, or attempts to monopolize, tying arrangements,and non-price predation.The Commission staff continues its efforts to engage in competition advocacy concerning the reductionof barriers to entry and the elimination of restraints on pro-competitive firm conduct, and to provide legaland economic policy analysis of issues related to single firm anticompetitive behavior.COMPLIANCEThe Compliance Division supports the other programs in the Commission's efforts to assure compliancewith Commission orders to cease and desist from certain conduct, orders for divestiture, and other forms ofrelief.The Commission modified three of its orders.Union Carbide Corporation's 1977 consent order wasmodified to allow the company to enter into requirements contracts for longer than one year with several gasdistribution companies.The Commission set aside a 1961 order in Firestone Tire & Rubber Company, thatprohibited Shell Oil Company and Firestone from using certain types of marketing agreements to sell tires,batteries and other automotive accessories.The order in New England Motor Rate Bureau was modified toallow the Rate Bureau to file collective rates in New Hampshire.CONSUMER PROTECTION MISSIONInfulfillingitsConsumerProtectionmission,theCommissionstrivestomaintainconditionsinthemarketplace that allow consumers to make informed purchase choices.To this end, it works to: increase theusefulness of advertising by ensuring that advertising is truthful and not misleading; reduce instances offraudulent or deceptive sales and marketing practices; and9prevent creditors from engaging in unlawful practices in granting credit, maintaining credit information,collecting debts, and operating credit systems.Under this mission the Commission also conducts activitiesdesigned to educate consumers and businesses about their rights and responsibilities under the laws andregulations it administers.There are five substantive programs within the Consumer Protection Mission: Advertising Practices;Service Industry Practices; Marketing Practices; Credit Practices; and Enforcement.These are supportedby the Economic and Consumer Policy Analysis program and a management program that includes the Officeof Consumer and Business Education.ADVERTISING PRACTICESUnder this program, the Commission works to ensure that advertising claims are not false or misleadingso that consumers can make informed purchases on the basis of truthful information.In fiscal year 1991, theCommission took action on several advertising practices cases, involving food and nutrition advertising,"900"numbersandenvironmentalclaims.EighteenconsentagreementswereacceptedinfinalbytheCommission,includingtworequiringatotalof$1.7millioninconsumerredress.inaddition,twoadministrative complaints were issued by the Commission.Health claims in food advertising remain prevalent, and the Commission committed to work closely withother government agencies to protect against false or unsubstantiated claims regarding important areas ofnutrition.The Commission provisionally accepted or accepted in final form consent agreements involvinghealthclaimsforproductssuchasvegetableoil,soup,cereal,mineralwater,vitamins,andotherfoodsupplements.In the first case brought against a manufacturer of alcoholic beverage for alleged deceptiveadvertisingandpackaging,theCommissionobtainedafinalconsentagreementfromtheproducerofafortified wine product that requires changes to the packaging of the product.TheCommissionissuedaunanimousfinaldecisioninvolvingnutritionalclaimsbyamajorcheesemanufacturer that should give substantial guidance to advertisers about how the FTC will interpret ads.Inaccordancewithacourtorder,theCommissioncompletedanamendmenttoitsregulationsundertheSmokeless Tobacco Act, requiring health warning labels to appear on specialty advertising items given orsold to consumers for their personal use, such as caps, tee-shirts, and key chains.TheCommissionfiledanadministrativecomplaintchallengingtheadvertisingof"900"numberinformationservicestochildren,andacceptedconsentagreementswithtwoothercompaniestoresolvesimilar allegations.The Commission also worked to eliminate unfairness or deception in connection with"infomercials" -- paid television advertising which may be represented as an independent program rather thana commercial.Cases in this area included settlements with those who appear in infomercials, as well as, withproducers.10Concern for the environment continues to result in advertisements using terms such as "biodegradable,""recyclable," and environmentally or ozone "friendly."In its first two cases involving environmental claims,the Commission obtained consent agreements prohibiting deceptive "ozone safety" claims.In addition to asking companies to substantiate their environmental claims when appropriate on a case-by-case basis, the Commission also considered possible guidelines on this issue.The Commission heldpublichearingstoconsiderwhetheritshouldissuenationalvoluntaryguidelinesonenvironmentaladvertising, to protect business from conflicting state regulations while ensuring consumers receive truthfuland accurate information upon which to base purchasing decisions.The Commission also sought writtencomment on issues relating to whether additional guidance to the public on environmental advertising andlabeling is needed, what form such guidance should take, and what it should cover.A task force was formedwith the Environmental Protection Agency and the United States Office of Consumer Affairs to addressissues raised by environmental advertising claims.SERVICE INDUSTRY PRACTICESActivities in this program focus on misrepresentations in sales of investment goods and services suchas precious metals, rare coins, art and mining projects.In addition to taking action against direct marketers,theCommissioncontinuedtoinvestigateandlitigatecasesinvolvingfirmsandindividualswhoenablefraudulent schemes by providing the products involved or other assistance, including suppliers of counterfeitart or misleading appraisals of investment goods.This program also works to eliminate fraud in connectionwith lottery application filing services.A final settlement with all defendants in one such fraud case resultedin the establishment of a redress fund for consumers of approximately $47 million.In eight investment fraud cases, the Commission obtained eleven settlements and a litigated judgmentordering a total of approximately $9 million in consumer redress.Seven new cases were brought, and onecase in litigation was substantially expanded.Three complaints were filed against major investment scamswith combined sales of approximately $20 million.These companies had allegedly defrauded approximately11,300 customers.The Commission obtained temporary restraining orders with asset freezes and froze assetsworth about $4-5 million.In the case already in litigation, an amended complaint was filed naming anothereight defendants and an order freezing $2-4 million in additional assets was issued.Actions to prevent deception in the advertising and sale of health care services are also conducted underthisprogram.Healthcarefraudremainsawidespreadproblem.Manyprospectivepatientsbasetheirselection of health care services, in part, on materials that misrepresent the efficacy or success of certainmedical procedures or the discomfort and inconvenience they should anticipate from them.11In the health fraud area, two permanent injunctions and $148,750 in consumer redress was obtained ina case involving the instructor of a permanent makeup workshop charged with misrepresenting the trainingprovided and certification awarded to attendees.A preliminary injunction was obtained in an ongoing casecharging a chain of weight-loss clinics with misrepresenting that consumers could adjust their metabolismand lose up to one-and-a-half pounds a day on its diet program.Consent orders were obtained prohibitingthree providers of infertility treatments from misrepresenting, or making unsubstantiated claims about, theirsuccess rates in achieving births or pregnancies.One order also prohibits the provider from misrepresentingthecostofanyinfertilitytreatment,theprovider'squalificationstoprovidethosetreatments,andanytherapeutic or beneficial effect of such treatment.A consumer education brochure was published warningconsumersaboutthehealthrisksandpoorweight-lossmaintenanceresultsofdietprograms.Fourteeninvestigations of physician-supervised, very-low-calorie diet programs and commercial diet clinics continued.MARKETING PRACTICESThe fraudulent telemarketing of consumer goods and services is the primary focus of this program,.Twoimportant trade regulation rules, the Funeral Rule and the Franchise Rule, arealso enforced under this program.Commissionactionsinfiscalyear1991challengeddeceptivepracticesinmarketingproductsandservices such as water purifiers, vacation packages, "free" prizes or awards, invention promotion services,copiersuppliesandavarietyofbusinessopportunities.TheCommissionfiledacomplaintagainstthemarketer of a purported AIDS cure, and charged a distributor-franchisor with making false claims regardingthe accuracy of a breathalyzer device used in bars and night clubs.As in the investment fraud area, theCommission continued to investigate not only direct marketers, but also those who organize, supply andfacilitate fraudulent schemes by providing them with essential services or assistance.Morethan$13millioninredresswasorderedinninedeceptivesalescases,includinga$1millionsettlement in the first 900 telephone number case brought by the Commission.In one case, a Louisianaoperation charged with offering a fraudulent vending machine business opportunity was ordered to pay $9.9million in consumer redress.Two companies charged with misrepresenting invention promotion servicesagreed to pay a total of $570,000 in redress.In another case, a seller of a pay per use fax machine businessopportunityagreedtopay$100,000inredresstosettlechargesthatitmisrepresentedthebusinessopportunity to potential franchisees.Afederalcourtorderedaminimumof$7.59millionberefundedtoconsumersbyamakerofheatdetectors.Theredressorder,whichmayresultinasmuchas$49.95millioninrefunds,followedaCommission order ruling that the company12misrepresented to consumers that the heat detectors could give them enough advance warning to escapesafely in most residential fires.An individual who pled guilty to charges that he conspired to violate the Commission's Franchise Rule,received a jail sentence of three years, and was ordered to pay $80,500 in consumer redress.In addition, arecommendationthatcriminalcontemptproceedingsbebroughtagainstapairofTexaswaterpurifiertelemarketers was referred to the U.S. Attorney in Fort Worth.When the defendants subsequently pled guiltytoothercharges,theyreceivedaggravatedsentences.Anadditionaltencomplaintsallegingfraudulentpractices have been filed in federal district court.In Funeral Rule enforcement, the Commission obtainedfive settlements ordering $197,260 in civil penalties and $14,270 in consumer redress.CREDIT PRACTICESThe Commission as a national enforcement presence in the credit area, continued its commitment toaggressively enforce federal laws to ensure the privacy of credit reports, equal access to credit, fair collectionpractices, and truthful lending practices.The Commission accepted final consent agreements in two cases relating to the obligation to notify jobor credit applicants when a credit report was used to deny an employment or credit application.Anothercompany charged with discriminating against credit applicants on the basis of age, sex or marital statusagreed to pay a $265,000 civil penalty to settle the charges.The Commission also worked to enforce the Truth-in-Lending laws to ensure that consumers understandthecostofloans.Anagreementwithamortgagecompanyrequirespaymentof$500,000inconsumerredress to settle charges it gave consumers inaccurate, incomplete, and misleading information regardingannualpercentageratesandthesizeofmonthlypaymentsforitsadjustableratemortgages.Aconsentagreementrequiringamortgagecompanytopay$200,000inredresswasacceptedbytheCommissionsubject to final approval.Another consent, accepted subject to final approval, settles charges that a companymade misleading claims through software and printed materials about the alleged savings of buying a carthrough financing rather than paying cash.Fraud and deception in the promotion of credit cards and credit services remains a great concern ofconsumers.Thistypeoffraudoftenoccursintheuseof"900"numberstomarketcreditcardsandadvertising for purported "credit repair" services.In fiscal year 1991, one company agreed to pay $20,000to the U.S. Treasury to settle charges that it misrepresented its credit repair services, and the Commissionfiled three other cases involving credit repair services in which final disposition is pending.13ENFORCEMENTUnder this program, the Commission enforces its cease and desist orders, the majority of FTC traderegulationrulesandspecialstatutesgoverningpractices,suchasthelabelingoftextile,wool,andfurproducts.Theprogram'seffortsencompassinvestigations,periodiccompliancereviews,and,whenwarranted,rulemakingproceedings.Consumereducationandguidancetoaffectedindustriesarealsoimportant to the success of this program.Under order enforcement, thirty-seven compliance reports were reviewed and forwarded to the Bureau.Onehundredandfifteenproposedorderswerereviewedforenforceability.Acivilpenaltyjudgementordering $100,000 in penalties and $25,000 in consumer redress was obtained against the owner of a truckdriving school for alleged violations of a Commission order.In addition, a settlement required a builder topay a civil penalty of $595,000 to resolve alleged violations of a Commission order.The program wasinstrumental in collecting $54,580 in civil penalties and interest owed by a dance studio that settled with theCommission in an earlier fiscal year.The Staff and Presiding Officer Reports on proposed amendments to the Mail Order Rule were placedon the public record.The proposed amendments would include extending the rule to cover telephone-ordersales and amending the definition of a "properly completed order" for credit sales.The Commission initiated an industry-wide survey of gasoline distributors to determine compliance withtherequirementsoftheOctaneRule.Thissurveyisacost-effectivemeansofpolicingapproximately200,000 retailers and distributors.The survey supplements continuing investigations where mislabeling wassuspected.A consumer fact sheet was issued to inform motorists about octane ratings for gasoline and howto determine what grade of gasoline their vehicles need.A survey assessing home insulation manufacturers, compliance with the R-value Rule continued, andfollow-up investigations of certain manufacturers suspected of rule violations were begun.TherulemakingproceedingtoamendtheApplianceLabelingRulecontinuedandtherecordwassupplemented with survey research commissioned by staff about how to make the "Energy Guide" labelsrequired by the Rule more user friendly.In the Used Car Rule area, with the aid of state and local authorities, inspection "sweeps" of over 500dealers were conducted in four states and six cities.Cases also were brought in four other states.Along withinjunctive relief, a total of $394,250 in civil penalties was obtained in twenty-seven cases.Litigation wasstarted in fourteen other cases.In the Textile, Wool and Fur Acts area, five cases were concluded.Three cease and desist orders resolveallegations that the sellers failed to disclose the country of origin of textiles in mail order catalogues orremovedcountryoforiginlabelsfromclothing.Intwocasesinvolvingallegedcontentmislabeling,injunctive relief and a total of $165,000 in civil14penalties was obtained.In the Care Labeling Rule area, the Commission filed its first formal action in federaldistrict court.In the Mail Order Rule area, three cases were resolved with injunctive relief and a total of $200,000 incivil penalties.A major publisher resolved alleged violations of the Unordered Merchandise Statute witha consent providing injunctive relief and a $175,000 civil penalty.Finally, a complaint was filed allegingthat a hearing aid seller failed to inform consumers, often elderly citizens, about their three-day cancellationrights, as required by the Cooling-Off Rule.CONSUMER EDUCATIONThe Office of Consumer and Business Education produced thirty-nine new and revised consumer andbusiness publications, some in Spanish.Many of the publications as well as other projects were done as jointeffortswiththeprivateandpublicsectors.MorethanthreemillioncopiesoftheFTC'sconsumerandbusiness publications were distributed by the agency.The Office worked with the National Association of Attorneys General to produce a public service videofeature about credit repair scams, which was released via satellite to about 1,000 television stations.TheOffice also worked with the Alliance Against Fraud in Telemarketing to produce radio spots to cautionconsumers about infomercials, which were distributed to 500 select stations.Further, the Office worked withAAA and its 1,000 media offices to distribute a message to consumers, which cautioned them about octaneoverbuying.Joint projects also were done with the National Coalition for Consumer Education ("The Statusof Consumer Education in the States"); with the National Association of Consumer Agency Administrators("The Roundtable Discussion Manual"); and with the Alliance Against Fraud in Telemarketing ("Fraud inTelemarketing Consumer Protection Handbook").Otheroutreacheffortsincluded:thenewspaperplacementofconsumercolumnswiththeBureauDirector's byline, which were carried in 342 newspapers; and the placement of promotion brochures forFTC's Best Sellers in 1,500 metropolitan area supermarkets.ECONOMIC ACTIVITIESThe Bureau of Economics provides economic support to the FTC's antitrust and consumer protectionactivities, advises the Commission about the impact of restraints and regulation on competition, and analyzeseconomicphenomenaintheAmericaneconomyastheyrelatetoantitrust,consumerprotection,andregulation.The primary mission of the FTC is to enforce the antitrust and consumer protection laws.In 1991, theBureau of Economics continued to provide guidance and support to those activities.In the antitrust area,economists offered advice on the economic merits of potential antitrust actions.Situations where the15marketplace performed well were distinguished from situations where the market might be improved byCommission action. When enforcement actions were initiated, economists worked to integrate economicanalysis into the proceeding, to provide expert testimony, and to devise remedies that would improve marketcompetition.In the consumer protection area, economists provided estimates of the benefits and costs to consumersof alternative policy approaches.Potential consumer protection actions were evaluated not only for theirimmediateimpact,butalsofortheirlonger-runeffectsonprice,productvariety,andoverallconsumerwelfare.AlthoughtheFTCisprimarilyanenforcementagency,itisalsochargedwithanalyzingdataandpublishing information about the nation's industries, markets, and business firms.Much of this work isundertaken by the Bureau of Economics.In 1991, economists conducted a number of studies on a broadarray of topics in antitrust, consumer protection, and regulation.ANTITRUSTIn the antitrust area, economists participated in all investigations of alleged antitrust violations and inthe presentation of cases in support of complaints.Economists also advised the Commission on all proposedantitrust actions.These activities consumed the bulk of the Bureau's resources assigned to directly supportthe Commission's antitrust responsibilities.SeveralstudiesundertakenbytheBureaualsosupporttheCommission'santitrustactivities.Forexample, during 1991, economists participated in a Congressionally-requested study of the Japanese keiretsusystem of automobile production.In addition, economists continued work on three case studies of the effectsof FTC actions in horizontal merger cases.CONSUMER PROTECTIONIn the consumer protection area, economists worked with attorney staff to evaluate proposals for fullphase investigations, consent negotiations, consent settlements, and complaints.In addition, economistsroutinely provided day-to-day guidance on individual matters and made policy recommendations directly tothe Commission.In addition to the Bureau's direct support for individual consumer protection matters, staff economistscontinued work on several consumer protection studies.These included the effects of fat and cholesterolinformation on consumer behavior, and the effects of department store price advertising. in addition, theBureau of Economics published a report on the costs and benefits of occupational regulation.REGULATIONIntheregulationarea,staffeconomistsactivelyparticipatedintheCommission'sCompetitionandConsumer Protection Advocacy Program.As part of this effort, Bureau staff reviewed16a variety of regulations that raise antitrust or consumer protection issues.Staff comments, filed in responseto invitations, include submissions to the Federal Communications Commission on the financial interest andsyndication rules, the cellular mobile telephone marketing rules, and 900-number telephone regulations; totheDepartmentofAgricultureonfoodlabelingregulations;andtotheAdvisoryCommissiononoceanShipping on the costs and benefits of ocean shipping conferences.In addition, the Bureau released a studyof the relative benefits to consumers and the government of petroleum import tariffs versus sales taxes as ameans of raising government revenue.EXECUTIVE DIRECTION,ADMINISTRATION AND MANAGEMENT,REGIONAL OFFICESTheOfficeoftheExecutiveDirectorprovidesadministrativeandmanagementsupportfortheCommission as well as providing management direction to the agency's ten regional offices.The ExecutiveDirector administers these functions through a series of divisions including Personnel, Budget and Finance,Procurement and General Services, Information Services, Automated Systems (ASD), and the Library.AUTOMATED SYSTEMSDuring 1991, The Automated Systems Division completed initiatives in direct support services, centralservices, office services and communication services.In "direct support," the Litigation Support and Economic Analysis Branch provided important documentmanagement and data analysis support for investigations in all three bureaus and several of the regionaloffices.The Visual Communications Center became a reality.Graphic and video services and technicalsupportarenowavailabletostaff.TechnicalsupportalsoexpandedtointernationalboundariesastheAutomatedSystemsDivisionprovidedsupportaswellasequipmenttoFTCstaffworkingonEasternEuropean project initiatives.In "central systems support," the Commission converted to a state-of-the-art financial accounting systemoperated by the Department of Interior and linked Budget & Finance staff to the new financial system andthe Treasury Department's Electronic Certification System.Personnel Division staff were hooked up to anewPayroll-PersonnelSystemoperatedbytheGeneralServicesAdministrationinKansasCity.Theprogramming support services contract was re-competed and awarded to NMI.A number of enhancementswere also made to existing systems on the central Prime computer (MIS, IRIS, OBPT, OSCAR, Pre-Merger)toincreaseproductivityforstaff.Newinitiativeswithlong--rangebenefitsthatgotunderwayincludedresearchintointegratedtext/data/imageprocessingcapabilitytoprovidemoreefficientprocessingandmanipulation of the Commission's major records17management workload.CD-ROM technology was introduced in selected offices as pilots.In "office support," the Automated Systems Division completed the installation of the first RegionalOffice Local area network in the Cleveland Regional Office.A major analysis was also completed of pc-based relational database systems, with a view toward selecting a standard database management tool forstaff attorneys to use for investigations.The goal is to include an improved database product in the inventoryof standard PC software that is supported by ASD and the Information Center.Other decisions made foradditional standard software available to users were PC-Tools and WordPerfect Office.Finally,withrespectto"communicationsservices,"accesstoavarietyofinformationofinteresttoexternal users and maintained in our central computers was greatly facilitated by installing communicationssoftware for commonly used protocols.A major upgrade of the Commission's voice message system wasalso completed that includes more capacity, higher performance and, most importantly, backup in the adventof a power outage.INFORMATION SERVICESThe Information Services Division made substantial progress towards providing Commission staff with"textmanagement"capability.Thefirstcollectionofrecordsbeingpreparedforentryintothatsystemincludes documents related to federal court proceedings involving the agency.Through 1982, those recordswere published in bound volumes.However, publication was curtailed for budgetary reasons.The newcapability will provide agency staff with greater access to the same records.The Information Services Division and Automated Systems Division installed a major enhancement tothe Management Information System.That change permits staff to restrict access to individual pieces ofinformation related to the data concerning agency law enforcement and administrative matters recorded inthe system.Those restrictions ensure that appropriate information is available within the Commission.TheDivisionrespondedto26,765consumercomplaintsandinquiriesin1991,whichisthelargestnumber on record and more than 13,000 more that in 1990.In addition, approximately 3,000,000 consumerand business education pamphlets and brochures were distributed.That is approximately 50% more thanin 1990, which was also a record year for distribution of those pamphlets and brochures.Baseduponthesuccessofanexperimentconductedin1990,theDivisionestablishedalong-termcontractualrelationshipwithaprivatefirmtoassistinthelogging,storing,maintaining,retrievinganddisposingofthemoretraditionalpaperrecordsthattheagencycollectsandgeneratesaspartofitslawenforcement efforts.18LIBRARYThe Library maintained the Commission's comprehensive research collection in legal, business, andeconomicsubjectsandprovidedresearchassistancetoFTCstaffandthepublicthroughavarietyofinformationsourcesandsystems.During1991,theLibrarystaffrespondedtoapproximately12,000reference questions, processed over 2,850 interlibrary loan requests, and circulated over 3000 items.TheLibrary introduced CD-ROM technology and databases to the collection this year.The Library's Information Center continued to train and assist FTC staff in the use of personal computerson related soft-ware, systems located on the agency's central computer, and in obtaining information fromthe agency's internal computer systems.During fiscal year 1991, Information Center increased its servicesby providing support in the use of selected audiovisual equipment.TheInformationCentertrained1,091employeesin86classeson33differenttopics,rangingfromcomputer security to Advance WordPerfect.The staff developed a Regional Office Training Catalog whichoffered courses available locally as well as on-site specialized training by headquarters staff.In addition toformal training and customer support, the Information Center published a number of instruction sheets ondifferent software packages.PROCUREMENT AND GENERAL SERVICESInadditiontoprovidingtheday-to-dayadministrativesupporttotheCommission,theDivisionofProcurementandGeneralServicescompletedseveralinitiativesduringfiscalyear1991.Theseaccomplishments included the awarding of contracts for: (1) cataloging support for the Library; (2) Over-the-Counter Drug Survey funded by the Food and Drug Administration; (3) redress fund administration; (4)administrative support services contract for an FTC/DOJ office in Poland; and (5) equipment purchases toimplement local area networks at Headquarters and in the regional offices.Numerous projects to improvethe Headquarters facility were either started or completed.These included: the first floor renovation underacyclicalrenovationprogram;significantimprovementstothephotocopierprogram,includingbothtechnologicalandcostefficiencyupgradesoftheCommission'scopiers;skylightrenovationcontract;installation of a new motor control unit for building mechanical operations; and cleaning of the exteriorparapets and statues.BUDGET AND FINANCEThe fiscal 1991 appropriation for the Federal Trade Commission was $76.1 million, including a $2.0million supplemental.An additional $357 thousand in spending authority was carried over from fiscal 1990.The Commission spent $76.3 million and used 926 work-years in fiscal 1991.This was an increase of 23work-years over the previous year, continuing the modest upward growth that began in fiscal 1990.Also,the Division of Budget and Finance engaged in a significant effort to19prepare for the conversion to a new accounting system as of October 1, 1991.HUMAN RESOURCE MANAGEMENTIn fiscal year 1991, the Commission continued to build on its human resources staffing level.The agencyconducted on campus interviews at 22 law schools and hired 29 law clerks and 10 summer legal interns.Also the agency hired two new economists under its newly acquired delegated examining authority.TheCommission was also successful in converting its automated personnel information system thereby givingthe agency integrated payroll-personnel capability.REGIONAL OFFICESThe Commission's regional offices continued to play a key role in fulfilling the agency's two missionsin fiscal 1991.In addition to engaging in the full range of enforcement and advocacy activities within theirrespective regions, the regional offices served a valuable "outreach" function by responding to consumercomplaintsandinquiries,andmaintainingcontactswithstateandlocalenforcementofficials,tradeassociations, and consumer groups.During fiscal 1991, the regional offices worked to expand their strongworking relationships with state attorneys activities undertaken on a cooperative basis with the states.20APPENDIXPART II (INVESTIGATIVE STAGE)CONSENT AGREEMENTS ACCEPTEDAND PUBLISHED FOR PUBLIC COMMENTMAINTAINING COMPETITION MISSIONAllegheny Corporation(See page 28.)American Stair-Glide Corporation(See page 28.)Connecticut Chiropractic AssociationThe Connecticut Chiropractic Association agreed not to interfere with its members' business practicesof advertising professional services to consumers.The complaint accompanying the proposed agreementallegedthattheassociationconspiredwithsomeofitsmembersbyadoptinganEthicalCodethatprohibited its members from offering free services or discounted fees and from advertising these servicesto consumers, from using advertisements that were not in H good taste," and from advertising unusualexpertise unless they have met certain requirements.The complaint further alleged that the associationcoerced its members to comply with the code by threatening: (1) to influence health insurance companiesto reduce reimbursements to-patients; (2) to report members to malpractice insurance carriers, and (3)to expel members from, the association.According to the complaint, the association's actions restrainedcompetitionintheStateofConnecticutbydeprivingconsumersoftruthfulinformationabouttheavailability, price, and quality of professional chiropractic services.The proposed consent agreementrequirestheassociationtoamenditsEthicalCodetodroptheserestrictionswhileallowingtheassociationtocontinuetorestrictmembers'claimsofspecializationiftheyhavenotmetstandardsestablished by a recognized chiropractic accrediting agency.Kreepy Krauly, U.S.A., Inc.Kreepy Krauly, U.S.A., Inc., a manufacturer of automatic swimming pool cleaning devices, entered intoaproposedconsentagreementtosettlechargesthatthecompanyillegallyenteredintowrittenagreements with its dealers concerning the retail prices at which its products are sold.Under terms ofthe proposed order, Kreepy Krauly is prohibited from entering into or enforcing such agreements withdealers, or coercing dealers to maintain or adhere to21any resale price and, in addition, must notify its officers and distributors that dealers are free to set theirown prices for the products to be sold.Madison County Veterinary Medical Association(See page 30.)Medical Staff of Broward General Medical Center(See page 30.)Medical Staff of Holy Cross Hospital(See -- Medical Staff of Broward General Medical Center, page 30.)Nintendo of America Inc.Nintendo of America Inc. agreed to settle charges that it obtained agreements from certain of its dealersto sell its home video game hardware at specified price levels.According to the complaint, Nintendo'sresale price maintenance activities increased consumer prices and restricted competition among retaildealers.TheproposedorderprohibitsNintendofromfixingorcontrollingtheretailpriceofanyNintendo video product, coercing retailers into committing to sell products at pre-determined prices,reducing the supply of products or imposing different credit terms to dealers who sell Nintendo productsat prices lower than those suggested by Nintendo or, for five years, terminating dealers for failure to sellat minimum suggested prices, Also, for a period of five years, Nintendo would be required to place adisclaimer on any material in which it suggests resale prices stating that the dealer is free to determinethepricesatwhichitwillselltheNintendoproducts.TheproposedorderappliestoallNintendoproducts, including hardware and home video game software.Nintendo of America Inc., a wholly-owned subsidiary of Nintendo Co. Ltd. of Kyoto Japan, is based in Redmond, Washington.Nippon Sheet Glass Company, Ltd.Nippon Sheet Glass Company, Ltd. and Pilkington PLC have agreed to a proposed consent agreementto settle charges that Nippon's 1990 acquisition of a twenty percent interest in Libby-Owens-Ford Co.,a wholly-owned United States subsidiary of Pilkington, was likely to reduce competition in the NorthAmerican market for wired glass.Wired glass is a specialty flat glass used primarily in shower and bathenclosures and in fire-retarding applications for products such as fire-doors.According to the complaintaccompanying the proposed consent order, the terms of the Nippon/Pilkington acquisition agreementgave the jointly22owned L-0-F rights to distribute, in North America, the polished wired glass produced by both Pilkingtonand Nippon, thus eliminating competition between Nippon and Pilkington and increasing the likelihoodof collusion among other firms in the market.Under terms of the proposed order, Nippon and PilkingtonareprohibitedfromjointlymanufacturingordistributingpolishedwiredglassinNorthAmericatocustomerslocatedintheUnitedStatesthroughL-0-ForanyotherfirmwithoutCommissionpriorapproval for a period of ten years.The proposed order maintains Nippon and Pilkington as independentsuppliers of wired glass to the United States.A consent agreement accepted last year between the sametwo firms settled charges that the same acquisition would lessen competition in the float glass market.That order, issued in fiscal year 1990, prohibits Nippon and Pilkington from entering into agreementsthatwouldeitherlimitthemanufactureoffloatglassinNorthAmericaorrestrictimportstoNorthAmerica.PepsiCo. Inc.PepsiCo, Inc. entered into a proposed consent agreement to settle charges that its acquisition of TwinPortsSeven-UpBottlingCompanywouldsubstantiallylessencompetitionintheproductionanddistribution of carbonated soft drinks in the Duluth, Minnesota area.According to the complaint issuedwith the proposed order, Twin Ports, a bottler and distributor of Seven-Up and Dr Pepper, sells non-Pepsibrands in competition with the Pepsi brands sold by the franchised Pepsi bottler in the Duluth area.Theacquisition thus would increase the likelihood of inter-brand collusion because PepsiCo could raise theprice of either its branded soft drinks or the non-Pepsi brand soft drinks that its Twin Ports operationbottles and distributes as a franchise in the area.Under terms of the proposed order, PepsiCo must divestTwin Ports within nine months to an acquirer approved by the Commission.In addition, for a period often years, PepsiCo must obtain Commission approval before acquiring the rights to distribute non-Pepsibrands, or before acquiring any person with such rights, in the Duluth area.RWE AktiengesellschaftRWE Aktiengesellschaft agreed to settle charges stemming from its $1.3 billion acquisition of VistaChemicalCompany.Thecomplaintissuedwiththeproposedconsentagreementallegedthattheacquisition would eliminate competition in the market for the manufacture and sale of high purity alcoholprocess alumina in the world.RWE and Vista are the only two companies that obtain alumina as a by-product in the production of high-purity alcohol used in making catalysts for the petroleum refining,chemical and automotive emissions control industries.The proposed consent order requires RWE tolicense certain technology for23the production of its alumina and to assist the licensee in the formation and operation of a joint venturecompany capable of establishing itself as a producer of high-purity alcohol process alumina comparableto that of Vista or RWE.Sandoz Pharmaceuticals CorporationA complaint filed against Sandoz Pharmaceuticals Corporation alleged that Sandoz engaged in an illegaltyingarrangementbyrequiringpatientswhopurchasedclozapine,adrugusedinthetreatmentofschizophrenia, to also purchase distribution and monitoring services marketed and arranged by Sandozunder its Clozaril Patient Management System.Clozapine is sold under the trade name Clozaril and isexclusivelymarketedintheUnitedStatesbySandoz.Accordingtothecomplaint,theillegaltyingarrangementrestrainedcompetitionandinjuredconsumersbyraisingthepriceoftreatmentandprevented federal, state, and local institutions and private health-care providers from administering theirown patient monitoring services.Under terms of the consent agreement, Sandoz will be prohibited fromrequiringanypurchaserofClozariltobuyothergoodsorservicesfromSandoz,orfromanyonedesignated by Sandoz.In addition, Sandoz must provide to any other sellers of clozapine, at reasonableterms, information on patients who have suffered adverse reactions to clozapine.The proposed orderdoesallowSandoztorefusetosellthedrugtoanyonewhodoesnotprovideadequatemonitoringservices for patients.Sentinel Group, Inc.Sentinel Group, Inc. entered into a proposed consent agreement concerning its acquisitions of at leastseventyfuneralhomesinGeorgiaandArkansas.TheCommissionchargedthattheacquisitions,covering five cities in the two states, reduced competition among area funeral homes and increased thelikelihood of collusion among the remaining firms in the five cities.Under terms of the proposed order,Sentinel is required to divest the Mincy-Fulford Funeral Home in Waycross, Georgia and the Erwin-Pettit Funeral Home in Summerville, Georgia within twelve months to a Commission approved acquirer.In addition, for a period of ten years, Sentinel must obtain prior Commission approval before acquiringany funeral home in an area extending fifteen miles outward in any direction from the city limits ofWaycross, Georgia; Summerville, Georgia; Gainesville, Georgia; Rome Georgia; Savannah Georgia; andFort Smith, Arkansas.In a related matter, a proposed consent agreement placed on the public record forcomment permitted Service Corporation International to acquire the Sentinel Group, Inc.24Service Corporation InternationalThe Commission accepted for public comment a proposed consent agreement that would permit ServiceCorporation International to acquire the Sentinel Group, Inc.According to the complaint accompanyingthe agreement, the acquisition would substantially reduce competition for funeral services in certainareasofGeorgiaandTennesseeandincreasethepossibilityofcollusionamongtheremainingestablishments providing funeral services in the areas.Under terms of the proposed consent, SCI wouldbe permitted to acquire Sentinel if it divests six specific funeral homes within twelve months: one eachinSavannah,Georgia,LaFayette,Georgia,andSoddyDaisy,Tennessee;andthreeinChattanooga,Tennessee.In addition, for a period of ten years, SCI must obtain prior Commission approval beforeacquiring any additional funeral homes in Savannah and LaFayette, Georgia, and in specific suburbanareas of Chattanooga, Tennessee.In a related matter, a proposed consent agreement placed on the publicrecord for comment requires Sentinel Group, Inc. to divest several funeral homes.Also during the year,SCI settled a civil penalty action alleging that its acquisition of stock in Centurion National Group, Inc.was in violation of the Hart-Scott-Rodino Act.Southbank IPA, Inc.The twenty-three obstetrician/gynecologist members of Southbank IPA, Inc. agreed not to conspire withothers to fix the prices charged for physician services.According to the complaint accompanying theproposed consent order, Southbank, its parent company, Southbank Health Care Corporation, and thetwenty-three physicians formed the Independent Practice Association in the Jacksonville, Florida areato contract directly with third-party payers, insurance companies, and employers providing self-insuredhealthbenefitstotheiremployees.ThecomplaintallegedthatSouthbankwasashamindependentpractice association and that the IPA and its members restrained competition among obstetricians andgynecologists in the Jacksonville area by boycotting third-party payers and attempting to increase thepayments paid to the physicians.The proposed order would require the physicians to dissolve SouthbankIPA and its parent, and prohibit the physicians from entering into any agreement with any competingphysician to set the fees charged for professional services.This consent agreement is the first one inwhich the Commission has ordered dissolution of a health care organization.Torrington Company, The(See page 32.)25CONSUMER PROTECTION MISSIONAmerican Body Armor & Equipment, Inc.American Body Armor, a manufacturer of bullet resistant vests, was alleged to have falsely representedthat its bullet resistant vests had been certified under a voluntary government standard.The companyagreed not to make false claims regarding the government certification status of its vests in the future,and to write past purchasers and offer to provide replacement vests at a substantially reduced cost.American Enviro Products, Inc.American Enviro Products has agreed to settle charges that it made allegedly unsubstantiated claims thatwhen placed in a landfill, its "Bunnies" disposable diapers would decompose within three to five yearsor "before your child grows up," and that they offered significant environmental benefit compared toother diapers.The order prohibits American Enviro from making unsubstantiated degradability claimsin the future, and requires environmental benefit claims to be supported by reliable scientific evidence.The order permits the company to make truthful claims that its plastic products will degrade into usablecompost when disposed of in municipal solid-waste composting facilities, if related disclosures are made.Automatic Data Processing, Inc.Automatic Data Processing was alleged to have made misleading claims through software and printedmaterials about the alleged savings of buying a car through financing rather than by paying cash.Theorder prohibits such misrepresentations in the future.Bertolli U.S.A., Inc.Bertolli U.S.A., the largest marketer of olive oil in the United States, was charged with making allegedlyfalse, misleading and unsubstantiated claims regarding the health benefits of its olive oil and overstatingtheresultsofastudyonoliveoilconsumption.Thecompanyagreednottomakesuchmisrepresentations in future advertising.DiveN' Surf, Inc.Dive N' Surf, a manufacturer of form-fitting garments, including wetsuits and bathing suits, allegedlyfailed to label the garments with the constituent fiber content, as required by the Textile Fiber ProductsIdentification Act.The order prohibits future violations of the Act.26Excell Mortgage CorporationExcellMortgagewaschargedwithprovidingconsumerswithallegedlyinaccurate,incompleteandmisleading information about annual percentage rates and the size of monthly payments for adjustablerate mortgages in violation of the Truth in Lending Act and Regulation Z.The company agreed to anorder prohibiting future violations of the Truth in Lending Act and Regulation Z, and requiring it to payconsumer redress totalling approximately $200,000.Newtron Products Company, Inc.NewtronProductsanditsprincipalswereallegedtohavedeceptivelyadvertisedtheperformancecapabilities of its Newtron Electrostatic Air Cleaner.The order prohibits the respondents from makingunsubstantiated representations regarding the performance of any air cleaning product unless it possessescompetent and reliable scientific evidence to substantiate those claims.O'Neill, Inc.O'Neill, a manufacturer of form-fitting garments, including wetsuits and bathing suits, allegedly failedtolabelthegarmentswiththeconstituentfibercontent,asrequiredbytheTextileFiberProductsIdentification Act.The order prohibits future violations of the Act.Pacific Rice Products, Inc.PacificRiceProductswaschargedwithmakingallegedlyunsubstantiatedhealthclaimsinadvertisements for its Vita-Fiber Rice Bran cereal.The company agreed to an order prohibiting it frommisrepresenting the results of any test or study in connection with the sale or advertising of any foodproduct, and requiring it to have competent and reliable scientific evidence for any health benefit claimfor any food product the company advertises in the future.Scali, McCabe, Sloves, Inc. & Volvo North America Corp.Volvo North America and Scali, McCabe, Sloves, Inc., its New York advertising agency, were allegedtohavefalselyportrayedthecomparativeperformanceofVolvoautomobilesinthe"BearFoot"adcampaign demonstrating a monster truck running over a row of cars, crushing all but a Volvo stationwagon.The Commission alleged that, in fact, in the ads some of the structural supports in the Volvosused had been structurally reinforced, while in some of the competing cars the structural supports hadbeensevered.VolvoandScali,McCabeeachagreedtoordersthatwouldprohibitsuchmisrepresentationsinthefuture,andrequireeachtopay$150,000totheUnitedStatesTreasuryasdisgorgement.27PART II (INVESTIGATIVE STAGE)CONSENT ORDERS ISSUEDMAINTAINING COMPETITION MISSIONAllegheny CorporationAllegheny Corporation agreed in a consent order to divest to a Commission approved acquirer withintwelvemonthsitsinterestsinWestwoodEquitiesCorporation,acompanythatprovidedrealestaterecords serving eighteen counties in several states.The complaint issued with the consent order chargedthat the proposed acquisition of most of the title insurance-related assets of Westwood would lessencompetition in the production and sale of title plant or back plant information in certain counties locatedin California, Illinois, Indiana, Tennessee and Washington.Title plants and back plants are records thatdetail the ownership and interests in real property.Title plant records are updated an a regular basis;back plant records are historical and are no longer updated.In addition to the divestitures, for a periodof ten years Allegheny is prohibited from acquiring any interest in specified firms that provide title plantand back plant services to the counties named in the order without prior Commission approval.American Stair-Glide CorporationAmerican Stair-Glide Corporation ("ASG") entered into a consent order to settle charges arising fromits acquisition of the Cheney Company, Inc.The order requires ASG to grant a non-exclusive perpetuallicense to Cheney's technology and know-how in the production of curved stairway lifts, straight stairwaylifts and vertical wheelchair lifts, and also a perpetual exclusive license to the Cheney name to a licenseepre-approved by the Commission.These lifts are used primarily by the elderly or disabled to move fromone level to another in residential homes and commercial buildings.The complaint issued with theconsent order alleged that the acquisition eliminated competition and established a dominant firm in theUnited States in the manufacture and sale of stairway and wheelchair lifts.The order also requires ASGto obtain prior Commission approval before acquiring any interest in a firm engaged in the production,distribution or sale of any curved stairway lifts, straight stairway lifts, or vertical wheelchair lifts in theUnited States for a period of ten years.The order further prohibits ASG from using the Cheney namein connection with any products sold in the United States.Finally, for a period of five years, ASG isprohibited from entering into any long term sales agreement or any exclusive agreements limitingadistributor's ability to sell the stairway lifts or wheelchair lifts of any other manufacturer.28Atlantic Richfield CompanyAtlantic Richfield agreed to an order requiring it to divest certain assets to settle charges that its $220million acquisition of Union Carbide Corporation would substantially reduce potential competition inthemanufactureofpropyleneoxide,thebasicfeedstockforurethanepolyetherpolyol(UPP)andpropyleneglycol(PG)production.ARCOandDowChemicalaretheonlydomesticproducersofpropylene oxide; ARCO and Union Carbide are leading producers of UPP and PG.The order requiresARCO to divest all of its PG assets acquired from Union Carbide and the UPP assets located in theUnited States and Canada that it acquired from Texaco.Included with the UPP assets are ARCO's tollingagreementwithTexacotomanufacturepolyolsandalicensingagreementtouseUnionCarbide'spolymer/polyol patent rights and technology.The consent order also prohibits ARCO from suing Texacoforitscontinuingdevelopmentofpropyleneoxidetechnologyanddissolvestheagreementthatprohibited Union Carbide and Texaco from competing with ARCO in the manufacture or sale of eitherchemical in the United States or Canada.The consent order contains a ten year prior approval provisionfor the acquisition of any company engaged in the production of UPP or PG in the United States orCanada.Before the consent order was accepted, the Commission's staff filed a motion for a preliminaryinjunction to prevent further acquisitions of the assets, rescind the acquisition already consummated, andseek rescission for the parties' violation of the filing and waiting period requirements under the Hart-Scott-RodinoAct.ThatcomplaintchargedthatARCOobtainedbeneficialownershipoftheUnionCarbide assets before complying with the provisions of the premerger notification reporting requirementsunder the HSR Act.Under terms of a final judgment filed with the complaint, ARCO and Union Carbideagreed to pay civil penalties to settle the Hart-Scott-Rodino charges.E-Z-EM.Inc.E-Z-EM, Inc., a Westbury, New York medical products manufacturer, agreed to a consent order to settlechargesthatits1988acquisitionofthebariumbusinessofLafayettePharmaceutical,Inc.wouldsubstantiallyreducecompetitioninthemarketforproductsusedtodiagnoseproblemsinthegastrointestinal tract.The complaint accompanying the consent order alleged that E-Z-EM's acquisitioncreated a virtual monopoly and increased the likelihood of collusion in the already highly concentratedbarium diagnostic products market.Under terms of the consent order, E-Z-EM agreed to divest all ofthe acquired assets within twelve months to a Commission approved acquirer.In addition to a priorapproval provision for certain future acquisitions, E-Z-EM must seek prior Commission approval of thesale or disposition of any assets to anyone engaged in the barium diagnostic products business for aperiod of ten years.29Madison County Veterinary Medical AssociationThe Madison County Veterinary Medical Association and four individual veterinarians consented notto conspire with others to refuse to participate in any program that offers low cost veterinary services.The complaint accompanying the consent order alleged that the Medical Association and four Huntsville,Alabama veterinarians, Robert Neil Cole, D.V.M, Donald Butler Popejoy, D.V.M., Billy Joe Renfroe,D.V.M.,andCharlesL.Smith,D.V.M.restrainedcompetitionbyconspiringnottoparticipateinaprogram offered by the National Animal Welfare Association that promoted low cost spays and neutersto veterinarians.The complaint further alleged that the Medical Association and its members illegallyagreed to restrict their advertisements in the Yellow Pages of Huntsville, Alabama.Under terms of theorder, the Medical Association and the four individual veterinarians are prohibited from collectivelyrefusing to deal or threatening to refuse to deal with a program that promotes the sale to consumers ofveterinary services at discounted prices.In addition, the order prohibits the veterinarians, attempt to fixor standardize advertisements and promotionals for veterinary services.Medical Staff of Broward General Medical CenterMedical Staff of Holy Cross HospitalThe Medical Staff of Broward General Medical Center and the Medical Staff of Holy Cross Hospitalindividually agreed to settle charges that they conspired to prevent the Cleveland Clinic Foundation fromentering the Fort Lauderdale area.The Cleveland Clinic has a multi-specialty group medical practiceofferingspecializedmedicalcareandancillaryservicesbysalariedphysiciansandothermedicalprofessionals at controlled prices.According to the complaint accompanying the consent order, the twomedical staffs and Dr. Diran M. Seropian, Chief of Staff at Broward General, threatened to boycottBrowardGeneralandHolyCrossiftheyaffiliatedwiththeClevelandClinic.Thecomplaintalsocharged that the physicians at the hospitals considered the proposed affiliation to be a competitive threatto their fee-for-service form of medical practice.The separate orders prohibit each Medical Staff fromentering into any agreement that would restrain competition between the two hospitals and the ClevelandClinicoranyotherhealthcareprovider.Duringfiscalyear1991,theCommissionissuedanadministrativecomplainttoDr.DiranM.Seropianchargingthathealsoparticipatedintheallegedboycott to prevent competition from the Cleveland Clinic.Medical Staff of Holy Cross Hospital(See -- Medical Staff of Broward General Medical Center, page 30.)30Roche Holding Ltd.RocheHoldingLtd.enteredintoaconsentordertosettlechargeswithrespecttoRoche'sproposedacquisition of Genentech Inc.The complaint accompanying the agreement charged that the acquisitionwould substantially reduce competition in three areas, the world market for vitamin C, the United Statesmarket for therapeutic drugs used in the treatment of human-growth hormone deficiency, and the UnitedStatesmarketforthedevelopmentofCD4-basedtherapeuticsusedinthetreatmentofAIDS/HIVinfection.According to the complaint, Genentech, based in California, and Roche, headquartered inSwitzerland, are both engaged in the research, development, and marketing of biotechnology therapeuticpharmaceuticals.Undertermsoftheconsentorder,Rochemustdivestitshuman-growthhormonereleasingfactorbusinessandGenentech'sGLCVitaminCassets,withintwelvemonths,toaCommission approved acquirer.In addition, for ten years, Roche is required to license its CD4-basedtherapeutic domestic patents for a specified royalty.The order also prohibits Roche and Genentech fromacquiringwithoutpriorCommissionapprovalanyinterestinanycompanyengagedintheclinicaldevelopment or the manufacture or sale in the United States of any products subject to the proposedorder for a period of ten years.T&N PLCA consent order settled antitrust concerns resulting from T&N PLC's acquisition of J.P. Industries, Inc.The complaint accompanying the order charged that the acquisition would lessen competition or tendto create a monopoly in the United States for the manufacture and sale of thinwall bearings used inautomobile and truck engines, and tri-metal heavy wall engine bearings used to power large engines, suchas those in locomotives and ships.Engine bearings are used to reduce friction between the rotating andstationary parts of engines.Under the order, T&N is required to divest various assets including, certaindomestic thin-wall engine bearings assets; tooling and related assets located in Scotland and England foruse in U.S. applications, and certain tri-metal heavywall assets, including castings, specifications, andelectroplating equipment.The divestitures must be completed within twelve months to a Commissionapproved acquirer.The order further specifies that if the assets cannot be sold by T&N or, after anadditional twelve months by a Commission appointed trustee, T&N will be required to include the J.P.Industries, engine bearings manufacturing facilities in McConnelsville, Ohio along with the other T&Nassets to be divested.During the year, the Commission approved two T&N divestitures: certain thinwallengine bearing assets were sold to Automotive Components Ltd., an Australian company; and, the tri-metal heavywall engine bearing assets were sold to Babbitt Bearings, Inc. of Syracuse, New York.31Torrington Company, TheThe Torrington Company and Universal Bearings Inc. agreed to settle charges resulting from Ingersoll-RandCompany'sproposedacquisitionofUniversal.Accordingtothecomplaintaccompanyingtheconsentorder,UniversalprematurelybeganconsolidatingitsaxleshaftbusinessintoTorrington,Ingersoll Rand's wholly-owned subsidiary, during the Hart-Scott-Rodino waiting period.Torrington isengaged in the production of anti-friction devices, including needle rollers, pins, and axle shafts.Thecomplaint further alleged that during this same period of time, Universal allocated the business of its axleshaftcustomerstoTorrington.UndertermsoftheorderTorringtonandUniversalagreednottoconsolidate the production, marketing or any other aspect of their respective businesses with an acquiringperson prior to the consummation of any proposed acquisition.Earlier in the year, the Commissionauthorized its staff to seek a preliminary injunction to block Ingersoll-Rand's acquisition of Universal.The Commission believed that the acquisition would substantially reduce competition in the manufactureandsaleofneedlerollers,cylindricalsteelpartsusedforanti-frictionpurposesinbearingsforautomobile transmissions, drive shafts,,and power steering units.The parties abandoned the transactionbefore the motion for a preliminary injunction could be filed in a federal district court.CONSUMER PROTECTION MISSIONAmerican Life Nutrition, Inc.American Life Nutrition, a wholesale dealer of dietary food supplements, agreed to settle charges it madefalse and unsubstantiated therapeutic claims in its Chinese-language advertising for five of its products.The order prohibits the respondents from making false and unsubstantiated health efficacy claims fortheir dietary food supplement products in the future, and orders them to pay for corrective advertisingthat will also appear in Chinese-language newspapers.Asics Tiger CorporationAsics Tiger Corporation agreed to settle allegations that it claimed persons wearing its "gel" athleticshoes would suffer fewer impact-related injuries than wearers of other athletic shoes, without havingcompetent and reliable evidence to support the claims.The consent agreement prohibits the companyfrom making unsubstantiated performance claims about its athletic shoes in the future.32Audio Communications, Inc.Audio Communications was alleged to have deceptively marketed "900" number information servicesto children.The company agreed to an order prohibiting it from misrepresenting the number of callsrequired to receive a free prize or premium or the ease with which a premium can be obtained.The orderalsorequiresAudioCommunicationstoexplainthematerialtermsandconditionsforobtainingapremium, and to prominently disclose the cost of the call and statements regarding the need to obtain aparent's permission to make the call.The company must also provide a reasonable means for the personresponsible for paying for the call to avoid unauthorized calls by children, or offer a one-time credit orrefund.Budget Rent-A-CarBudget Rent-A-Car agreed to settle charges alleging that it did not disclose to renters that it failed toinspect automobiles subject to recall notices within a reasonable period of time and, if appropriate, makenecessary repairs.The order requires Budget to either inspect and repair affected vehicles within areasonable time after receiving the recall notice, or disclose to renters that the vehicles are subject tosafety recall notices and may contain defects.Canandaigua Wine CompanyCanandaigua Wine Company was charged with allegedly misrepresenting, through packaging, marketingand advertising, that its fortified wine beverage, Cisco, was a low-alcohol, single serving drink, and thatthe deception led to cases of alcohol poisoning.The order prohibits the company from representing thatCisco is a low-alcohol, single serving beverage, and from encouraging retailers to display it next to low-alcohol products.The agreement also requires Canandaigua to change the shape and color of the bottle,and recall retail displays implying Cisco is a single serving drink.CPC International, Inc.CPC International, a major seller of food products, was charged with making allegedly false, misleadingand unsubstantiated advertising claims about the effect of Mazola Corn Oil and Mazola Margarine onserum cholesterol levels.CPC agreed not to make claims concerning the product's ability to reduce theriskofdevelopingheartdiseaseortoreduceserumcholesterollevels,unlessatthetimesuchrepresentations are made, they are substantiated with competent and reliable scientific evidence.TheFTC investigation was conducted in cooperation with ten states.33Electronic-Data Systems CorporationElectronic Data Systems (EDS) has agreed to settle charges that it failed to tell job applicants deniedemployment based on information in their credit report that the report was at least part of the reason forthe denial.The order requires EDS to mail certain of these applicants letters stating the reasons for thedenial along with the name and address of the credit reporting agency which supplied the report, andprohibits future violations of the Fair Credit Reporting Act.Fertility Institute of Western MassachusettsFertility institute and its owner agreed to settle allegations that they made false and unsubstantiatedclaims about the success rates of their infertility treatments, and with making unsubstantiated claims inthe promotion of their services.The respondents agreed not to make misrepresentations regarding theirinfertility services in the future.Guild Mortgage CompanyGuild Mortgage Company allegedly provided consumers with misleading, inaccurate and incompleteinformation regarding the annual percentage rate and the size of monthly payments of its adjustable ratemortgages.The company agreed not to violate the Truth in Lending Act and Regulation Z in the futureand to pay $500,000 in consumer redress.Hal Morris(See -- Money Money Money, Inc., page 35.)HaverhillsHaverhills, a mail order company, agreed to settle allegations that it made false and unsubstantiatedclaims regarding suntanning and fuel-economy devices.The order prohibits Haverhills and its ownersfrom misrepresenting the safety or abilities of such devices in the future.IVF Australia, Ltd.IVF Australia, one of the largest providers of infertility services in the United States, agreed to settleallegations that it misrepresented the success rate of its in vitro fertilization services.The companyagreed not to make such representations in the future.The allegations did not concern the quality of theinfertilityservicesprovided,butonlyaddressedthesuccess-rateclaimsthecompanymadeinitsadvertisements.34Jerome Russell Cosmetics, U.S.A., Inc.JeromeRussellanditsowner,DavidJ.Marcus,agreedtosettlechargesthattheymadefalseandunsubstantiatedozonesafetyclaimsinmarketingcosmeticsthatcontainaharmfulozone-depletingsubstance.The order prohibits respondents from representing that any product containing a Class Iozone-depleting substance will not damage the ozone layer, and from making unsubstantiated claims thata product containing an ozone-depleting substance has environmental benefits.Lewis Galoob Toys, Inc.Lewis Galoob Toys agreed to settle charges that it made allegedly false and misleading claims regardingthe need for assembly of certain Lewis Galoob toys, the purchase and operation of the toys, and thenumberofitemsreceivedwhenthetoysarepurchased.TheorderprohibitsGaloobfrommakingmisrepresentations in the advertising, labeling, sale or distribution of toys.Miles, Inc.Miles was charged with making allegedly unsubstantiated advertising claims about the health benefitsof its One-A-Day brand multiple vitamins.The company agreed not make such unsubstantiated claimsin the future.Money Money Money, Inc., & Hal MorrisMoney Money Money, Inc. and Hal Morris were charged with making allegedly false claims in a 30-minute commercial advertising the availability of government grants.The infomercial, called "MoneyMoneyMoney",isoneofaseriesrespondentsproduced.Therespondentsagreednottoairtheinfomercial again and agreed to pay $175,000 for consumer redress.Nationwide Acceptance Corp.Nationwide Acceptance settled allegations that it violated the Fair Credit Reporting Act by failing tonotify consumers who were denied credit that it considered information from credit bureaus or other thirdparties.The order requires Nationwide to provide such notices in the future, and to notify consumersto whom it denied credit and to whom it did not give proper notification.NME Hospitals, Inc.NME Hospitals, an infertility clinic, agreed to settle allegations that it misrepresented the success rateof its in vitro fertilization services.The company agreed not to make such representations in the future.The allegations35did not concern the quality of the infertility services provided, but only addressed the success-rate claimsin advertisements.Nobody Beats the Wiz, Inc.NobodyBeatstheWiz,aretailerofelectronicgoods,allegedlyfailedtomakeconsumerproductwarrantiesavailabletoprospectivebuyersofitsmerchandiseinviolationoftheMagnuson-MossWarrantyAct'sPre-SaleAvailabilityofWrittenWarrantyRule.Thecompanyagreedtoanorderrequiringittomakethetextofanywrittenwarrantyonaconsumerproductcostingmorethan$15readily available to consumers, and to instruct retail store managers and assistant managers engaged inthe sale of consumer products of their obligations under the Act.Perrier Group of America, Inc., TheThe Perrier Group agreed to settle allegations that it falsely advertised that Perrier sparkling mineralwater is not processed or filtered before it is bottled.The consent agreement prohibits Perrier fromfalsely claiming that any mineral water it sells is unprocessed or unfiltered, or from making false claimsregarding the manner in which the water is carbonated.Richard B. Pallack, Inc.Richard B. Pallack, Inc. settled allegations that it removed foreign-origin labels from men's clothing inviolation of the Wool Products Labeling Act and the FTC Act.The order prohibits future violations ofboth Acts.Richard CrewRichardCrewagreedtosettleallegationsthathemadefalseandunsubstantiatedclaimsfortheEuroTrym Diet Patch, a purported weight-loss product, and that he falsely represented that the program-lengthcommercial,producedbyTwinStarProductions,Inc.,wassomethingotherthanapaidcommercial.The order prohibits Crew from making unsubstantiated efficacy claims for any product orservice and from misrepresenting that a paid advertisement is an independent program.Robert FrancisRobertFrancisagreedtosettleallegationsthathemadefalseandunsubstantiatedclaimsfortheEuroTrym Diet Patch, and that he falsely represented that a program-length commercial, produced byTwin Star Productions, Inc., was something other than a paid commercial.The order prohibits Francisfrom making unsubstantiated efficacy claims for any36product or service and from misrepresenting that a paid advertisement is an independent program.Strawbridge & Clothier, Inc.Strawbridge & Clothier agreed to settle allegations that it failed to disclose whether the textile productsin its mail order catalogs were made in the United States, imported or both, and failed to disclose propergeneric names of fabrics.The company agreed to an order prohibiting future violations of the TextileFiber Products Identification Act.Taylor Woodcraft, Inc.Taylor Woodcraft agreed to settle allegations that it